Budget 2024: Bridging skill gap in tech sector need of the hour

The Economic Survey 2023-24 tabled in Parliament on Monday recognised the need for greater skill development in the technology sector to tap into the newer job demand. The survey noted the immediate task of the skilling programme in India is to plan and equip the workforce with technological advancements and meet global market demands. The areas of focus in the technology sector for skilling including blockchain, AI, machine learning, Internet of Things, cybersecurity, cloud computing, big data analytics, augmented reality, virtual reality, 3D printing, and web and mobile development, would become important in the changing demand-supply dynamics of services.

The survey said the information and computer-related services share of the total gross value addition in FY23 stood at 5.9% and the flourishing growth of IT services has also supported the expansion of Global Capability Centres (GCCs) and the tech start-up ecosystem in India. As of FY23 India had over 2,740 GCC units and these centres have contributed to the economic growth by providing high-quality employment. According to the survey, in FY23, the total talent employed in Indian GCCs exceeded 16.6 lakh with over 42% of the workforce engaged in engineering, research, and development (ER&D), 34.5% in business process management (BPM), and 23.4% in IT services. The software, internet and banking, financial services, and insurance (BFSI) sectors collectively accounted for about 58% of India's IT GCC talent. The revenues from India's GCCs have also increased by $46 billion in FY23, growing at a compound annual growth rate (CAGR) of 11.4%.

While noting the demand for talent in the sector is high, however, what is a more pressing issue is the talent gap with a shortage of IT, data science, and cybersecurity workers. “As per a survey, for Q3 2024, 76 per cent of IT employers reported difficulty in finding the skilled talent required globally. To incentivise GCCs in India, promoting specialisations in higher education is essential” it stated.

The government, however, has been taking initiatives to address the sectoral problem. The ‘Future Skills PRIME’, which is a joint initiative by the Ministry of Electronics & Information Technology (MeitY) and NASSCOM is aimed at creating an up-skilling and reskilling ecosystem in the above focus areas for continuous skill development of IT professionals. Initiatives like the Digital Skilling program in emerging and future technologies are aimed at skilling, reskilling, and upskilling one crore students through internships, apprenticeships, and employment opportunities, Pradhan Mantri Kaushal Vikas Yojana (PMKVY 4.0) that focuses on skill development and training in areas such as Industry 4.0 AI, robotics, mechatronics. “As India looks forward to creating millions of jobs by 2030, dovetailing this transformation in the demand-supply dynamics of services is pivotal to meeting the hiring requirements in the medium term” the survey states.